Gold

The U.S. Labor Department reported a surge in weekly unemployment claims for the week ending May 4, with applications rising by 22,000 to 231,000. This marks the highest level of claims since August 2023, exceeding the four-week average of 215,000 and economists' forecast of 214,000.

Gold futures inched lower on Thursday, as the U.S. dollar gained strength and investors remained cautious ahead of crucial economic data releases. The most active June 2024 contract for gold futures closed at $2,322.30 in New York, down $1.90.

According to Minneapolis Fed President Neel Kashkari, the Federal Reserve's inflation crusade may still not have restricted policy enough to bring down high prices. Speaking during an interview at Reuters in New York the president of the Minneapolis Federal Reserve Bank suggested that interest rates are likely to stay put for an extended period.

Today’s strong recovery in gold was based on two important factors. The first is a delayed reaction to Friday’s jobs report, and the second is an increased geopolitical concern regarding Israel's long-promised ground invasion of Rafah in Gaza.

The latest U.S. jobs report showed a slowdown in hiring, with nonfarm payrolls increasing by 175,000 in April, down sharply from March's robust 315,000 new job gains. The unemployment rate held steady at 3.9%, while average hourly earnings rose less than expected.

As of 5:10 PM ET, gold futures for the most active June contract traded lower by -$1.40, settling at about $2,313. The session saw prices range from a low of $2,294.30 to a high of $2,336.10.

Gold prices surged on Wednesday after the Federal Reserve left interest rates unchanged and struck a more dovish tone, acknowledging that progress on lowering inflation has stalled. The precious metal, often viewed as a hedge against inflation, benefited from the central bank's signal that further rate hikes are unlikely in the near term.

Gold futures prices plummeted on Tuesday, dipping below the crucial $2,300 per ounce level, as traders braced for a potential hawkish shift from the Federal Reserve in its upcoming policy decision. The precious metal, often viewed as a hedge against inflation, came under intense selling pressure amid concerns that the central bank could strike a more aggressive tone on future rate hikes.

As of 5:30 PM EDT, gold futures based on the most active June 2024 contract are down $2.10, or -0.09%, settling at $2347.50. Today's decline would have been more significant if not for the dollar's weakness. The dollar is currently down -0.26%, taking the dollar index to 105.525.

Today's release of the Personal Consumption Expenditures (PCE) price index for March revealed that inflation remains entrenched in the U.S. economy, though not as elevated as some analysts had feared. The reaction in the gold futures market was relatively muted in response to the data.